Microsoft ready to re-Surface

After taking over from the shy and retiring Steve Ballmer, the decidedly more noisy Satya Nadella has had a calm first 100 days as Microsoft Corp chief executive.

But the word on the street is that he will hit his first rough patch next week when unveils the latest models of the tepidly received Surface tablet.

Shareholders have thought that Nadella’s “mobile first, cloud first” strategy is a good start and when ever talked about the software maker as a “devices and services” company the share price rose.

But Microsoft is expected to unveil the third generation of its Surface devices and show off a smaller tablet, to address the fast-selling lower end of the market dominated by Apple’s iPad mini, Amazon Kindle Fire, Google Nexus and Samsung’s Galaxy range.

And this is where Nadella has a problem – Vole lacks the devices that can make a dent in the market. Vole’s Surface, launched in October 2012, has only 2 percent of the market and the Surface tablet, while nice, was expensive.

If Nadella does make a smaller cheaper Surface, then he will get stick from those who think that Vole should still to the high end, even if that cunning plan had not worked. But the “expensive tablet” pundits point out there are signs that Microsoft’s Surface Pro 2 is starting to attract Microsoft’s core business customers as an Ultrabook replacement.

However, Nadella has his work cut out for him. ValueAct Capital led the shareholder revolt last year and has consistently lobbied against Microsoft’s hardware effort, including its costly acquisition of Nokia’s handset business.